Cash from Kenyans in America hits historic highMonday July 20 2020
Cash sent home by Kenyans living in North America hit a historic high of Sh15.7 billion ($145.95 million) in May, defying the tough economic situation facing workers in the region since the Covid-19 pandemic struck.
Data from the Central Bank of Kenya (CBK) shows the remittances from the region, which includes Canada, the United States and Mexico, rose by Sh2.5 billion or 19.6 percent from Sh12.76 billion ($118.71 million) in April.
This saw North America deepen its share of total remittances to 56.5 percent of the Sh27.78 billion ($258.15 million) sent to Kenya in May.
This is in contrast with May last year when the region accounted for 48.6 percent of total remittances. The CBK singled out the US as among the countries which brought in the highest remittances.
The US leads the world in Covid-19 infections, and the number of job losses in the country crossed the 40 million mark in May due to the effects of the coronavirus
The Washington-based Pew Research Centre says some 90,000 Kenyans are currently living in the US, including as many as 30,000 without authorisation.
The CBK had tipped diaspora remittances to dip owing to job losses and salary cuts from the many Kenyans living abroad.
However, the May remittances represented a recovery from a six-month low of Sh22.4 billion ($208.21 million) recorded in April.
The rise came in the period remittances from Europe also recovered from Sh3.75 billion ($34.9 million) to Sh4.59 billion ($42.65 million). Remittances from the rest of the world rose by 27 percent to Sh7.48 billion ($69.5 million).
The CBK reckons that remittances were boosted by recoveries in major economies abroad and by more ways to send cash, including straight to the recipients’ mobile phones.
Diaspora remittances offer key support to the shilling that has been under pressure from reduced flow of foreign currencies on reduced farm export earnings and tourism.
The shilling opened Monday at 107.43 units to the dollar -- an all-time low -- for the local currency as importers demanded more dollars to restock goods following the relaxation of Coivd-19 control measures.
“The Kenya shilling weakened against major international and regional currencies during the week ending July 16, on account of unevenly matched demand and supply of dollars in the interbank market,” the CBK said in end of week notice.
Currency dealers say the local currency is under pressure due to dollar demand from the energy and manufacturing sector outstripping hard currency inflows from remittances.
Official usable foreign exchange reserves have dropped by 48 million between July 2 and July 16 to $9.669 billion.
The current level is equivalent to 5.87 months import cover, in comparison with the required minimum of 4.5 months.